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Migrant well-being after leaving transition economies

Evidence is mixed on whether quality of life
improves for migrants from post-socialist economies

Elevator pitch

Most comparative research suggests that
immigrants from post-socialist countries earn less than natives, work in
jobs for which they are overqualified, and may experience unhappiness
compared with natives, other immigrants, and non-migrants. In contrast, one
study presents causal evidence which shows that moving from transition
economies to live in the West increases the incomes, life satisfaction, and
freedom perceptions of those who move. Credibly assessing whether leaving
transition economies improves movers’ quality of life remains a challenging
empirical question.

Key findings

Pros

Post-socialist immigrants who are
happy and productive abroad positively contribute to their home
and destination countries.

Temporary migrants from “Eastern
Partnership” countries investing in their skills before moving
can increase their earnings upon return and constitute a “brain
gain” for the sending countries.

One study shows a positive causal
effect of migration on the well-being of those who leave
transition economies to work and live in the West.

Cons

Few studies credibly assess the
well-being consequences of leaving transition economies, and the
evidence focuses mainly on experiences in the West.

Post-socialist immigrants earn less
than natives in Europe, though the earnings gap could decrease
over time.

Post-socialist immigrants often
experience occupational downgrading or “skill waste” in the
destination countries.

Migrant happiness in the destination
countries may decline over time due to rising aspirations or
adaptation, or if migrants compare themselves to high-earning
natives.

Author's main message

Post-socialist migrants can contribute
positively to social outcomes at home and abroad. Recent research finds that
leaving transition economies leads to improvements in income, life
satisfaction, and freedom perceptions. However, the comparative evidence is
mixed and suggests that immigrants from transition economies have worse
labor market outcomes than natives and certain immigrant groups.
Policymakers need to consider the material and emotional well-being of
immigrants from transition economies and reduce the barriers to labor market
integration, as there can be potential “win-win” situations if migrants are
happier and more productive abroad.

Motivation

The fall of the Berlin Wall in 1989 marked the
beginning of the transition process from planned to market economies in the
former Soviet Union and Central and Eastern Europe. Following sharp
declines, both life satisfaction and income rose in these countries in the
mid-1990s, although the “happiness recovery” was less than that in GDP,
leading to the conclusion that ordinary citizens “paid” for the transition
with their happiness [1], [2]. The “unhappiness in transition”
was due to the inapplicability of the education received under socialism,
deteriorating public goods, declining social protection, income inequality,
and stagnating labor market conditions [1], [2].

Given these unique experiences during the
transition, post-socialist movers may be different from other migrants.
Specifically, while scholars still debate whether economic growth increases
a country’s subjective well-being (SWB) over time, transition economies are a special case: in these societies,
economic growth predicts short- and long-term SWB fluctuations. While income
gains may generally fail to translate into higher SWB for other groups of
economic migrants, economic migration and the rise in material standards it
brings should positively influence the perceived well-being of
post-socialist movers.

Discussion of pros and cons

What is well-being and how is it
measured?

Human well-being has both material and
non-material aspects. Although important, objective measures such as
income, consumption, or labor market outcomes tell an incomplete story
about “quality of life.” SWB indicators, however, which are commonly
measured using survey questions about negative and positive feelings,
life satisfaction, and life purpose, provide useful information about
people’s quality of life. Research has established that, while not
perfect, these data are valid and reliable and are comparable across
different countries and levels of development.

There can be large gaps between the
objective and subjective metrics because frustration or dissatisfaction
may accompany processes which improve a person’s material well-being.
For example, while migration may increase one’s income, it may also be
associated with psychological distress due to separation from loved
ones, or hardship due to discrimination, or lack of assimilation
abroad.

Although migration from a poor to a rich
country typically increases movers’ incomes, it can also lower happiness
because of adaptation problems and rising aspirations. While migrants’
(absolute) incomes increase, so do their expectations about life as they
compare themselves to high-earning natives in the host countries [3]. Moreover, migrants who
enjoyed a certain status in their origin country may not have the same
social position after moving, due to language barriers, discrimination,
or because their skills and qualifications are not applicable abroad
[4].

Why the well-being of post-socialist
immigrants matters

Post-socialist immigrants comprised
one-fifth of the global stock of migrants in 2010 and are the most
significant migrant labor source for the European OECD countries [3], [5]. How these immigrants fare
abroad matters for both sending and receiving societies. In the
destination countries, immigrants with a high objective and perceived
quality of life can be more productive and less dependent on health care
and social assistance systems. Given the relatively well-educated
populations and proximity to Europe, migration from transition countries
can also potentially help with unsustainable fiscal deficits, aging
populations, and skill shortages in Europe and beyond.

From the sending countries’ viewpoint, those
living abroad can contribute to the homeland’s development through
remittances, investments, and the spread of ideas and technology [6], [7].

Despite their importance for policy and
social outcomes in both origin and receiving countries, few studies
credibly evaluate the well-being consequences of leaving post-socialist
countries. A lack of data tracing the experiences of migrants across
international borders, along with methodological problems, make it
difficult to study this topic. Comparing the well-being outcomes of
post-socialist immigrants with those of other groups—such as natives,
other immigrants, or stayers—only provides a descriptive assessment, but
does not reveal whether any differences in outcomes are due to leaving
or to other factors. Identifying the causal impact of leaving transition
economies on the well-being of those who move requires a credible
evaluation of what the well-being metrics would have been if these
immigrants had never left.

Comparative evidence on migrant
well-being in Western Europe

Labor market integration
of immigrants from transition economies

Most of the comparative research on the
labor market performance of immigrants from transition economies
tends to focus on Eastern European migrants following the 2004 EU
enlargement. These studies have mixed results depending on the time
period studied, as the socio-demographic composition of immigrants
has changed over time, both due to the economic crisis and EU
enlargement. In Germany, for example, EU-8 migrants who arrived after 2008 were more educated
than those arriving prior to 2004 [8].

However, several unifying findings
emerge from this research. In most destination countries, despite
high levels of education, Eastern European migrants earn less than
natives—although there is evidence pointing to assimilation over
time [8], [9]. Studies further show
that post-socialist immigrants experience occupational
“downgrading,” i.e., they work in jobs that belong to lower
occupational classes than the jobs they had at home [8], [10], [11].

In Germany, post-2004 EU-8 immigrants
had more education than similar natives but earned between 7% and
10% less, with the native−immigrant earnings gap decreasing for more
recent cohorts [8]. Post-2004
immigrants also earned more, on average, than pre-enlargement
immigrants [8]. Similarly, in Sweden, in
2010, EU-10 migrants had lower wages than natives, despite being
more educated, with the largest negative effects found for Bulgarian
and Romanian men (earning 10.5% and 11.5% less than comparable
natives, respectively) and Lithuanian women (earning 10.9% less)
[12]. In Ireland, EU-10
immigrants were the lowest-earning group compared to both natives
and other immigrants in both 2006 and 2009, although the
native−immigrant gap declined for EU-2 migrants between 2006 and 2009 [9].

Studies also examine immigrants’
employment probabilities and the types of jobs they take abroad. In
Spain, compared with natives, male immigrants from the 2004 and 2007
enlargements (mainly Poles, Romanians, and Bulgarians) were less
likely to work upon arrival, while female immigrants were more
likely to work upon arrival compared to natives [13]. Post-enlargement (2004
and 2007) EU immigrants were more likely to work upon arrival than
other immigrant groups, with the employment situation improving with
years spent in Spain. The economic crisis altered some patterns,
with enlarged-EU men being the major losers [13].

Using data from the EU Labor Force
Survey for 2004−2009, one study finds that compared with natives,
EU-10 migrants (and those from Malta and Cyprus) have a lower
employment probability in the Netherlands, Finland, and Germany, but
a higher chance of being employed than UK natives [10]. Compared with EU-15
immigrants (the EU-15 being the EU member countries prior to the
2004 accession), EU-10 migrants (and Maltese and Cypriots) have
higher employment probabilities than non-EU immigrants in Finland,
Germany, the Netherlands, and the UK. In Finland, EU-10 immigrants
(and those from Malta and Cyprus) have about equal employment
prospects as EU-15 immigrants. The study also shows that Eastern
European immigrants are also more likely to have low-skilled jobs
compared with natives and that they tend to have temporary jobs,
which are often of low quality. Finally, despite being relatively
well-educated, both Central and Eastern European immigrants face
difficulties in having their education and qualifications recognized
abroad [10].

Foreign language skills and other
training can improve the labor market performance of post-socialist
immigrants abroad. For example, research on temporary “Eastern
Partnership” (EaP) migrants—i.e., migrants from Armenia, Azerbaijan,
Belarus, Georgia, Moldova, and Ukraine—shows that about one-fifth of
those leaving for the West (i.e., the EU and the US) try to improve
their labor market chances abroad by taking language courses or
obtaining qualifications that will be recognized in the destination
country. Those who invest in skills before leaving are less likely
to experience occupational downgrading [11]. Given that these are
often temporary migrants, the experiences acquired abroad, as well
as the investments in human capital and skills, may constitute a
“brain gain” for the sending countries. Moreover, the additional
skills can help these migrants earn higher incomes upon return.

The evidence comparing the life
satisfaction outcomes of post-socialist immigrants with those of
other groups (e.g., natives, other migrants, or stayers)
predominantly focuses on Western Europe as a destination. Using data
from the European Social Survey (ESS) for 2008 and 2010, one study
finds that recent EU-11 migrants and those from Turkey and Ukraine
are, on average, 0.25 points happier than stayers (as measured on a
self-reported scale from 0 to 10, where 0 corresponds to “extremely
unhappy” and 10 to “extremely happy”). More established migrants,
however (i.e. those who arrived six or more years ago), are 0.75
points happier than stayers [4]. These effects are
economically small and disappear after taking into account that
those who migrate may be happier than stayers to begin with. There
is variation by origin country, moreover, with those who left Russia
and Romania being happier than stayers, but those who left Poland
being one point unhappier compared to stayers [4].

Using earlier ESS data, another paper
finds that Eastern European immigrants are unhappier than natives
and other immigrants in 13 Western European countries.

Similarly, earlier research finds that
the average overall life satisfaction of Eastern European immigrants
living in Western Europe is lower than that of natives and, in some
cases, lower than that of other immigrant groups. These
differentials could be due to the fact that some of the Eastern
European migrants arrived from conflict regions and have not yet
assimilated into the host societies. It appears, however, that
Eastern European immigrants are nevertheless more satisfied than
natives and other immigrants with social and institutional
conditions in their host countries.

Well-being of migrants from
post-socialist countries moving to other transition countries

While most of the studies focus on the
well-being consequences of moving to the West, the majority of
transition country migrants, and particularly those from the former
Soviet Union, reside in other transition economies. Russia hosts almost
a quarter (24%) of the nearly 45 million immigrants from post-socialist
countries worldwide, followed by Ukraine (10%) and Kazakhstan (6%). In
comparison, Germany hosts 11% and the US 5% [5].

Recent research finds that Russia is de
facto an extended labor market for low-skilled and relatively poor
temporary EaP migrants [11]. Despite the
lower income gains from migration compared to the West, Russia is
geographically closer and institutionally more similar to the sending
countries, which probably reduces the psychological costs of
emigration.

Moreover, temporary EaP migrants going to
Russia enjoy a relatively high transferability of skills, given
historical ties and Russian language fluency. Yet these migrants are
less likely to improve their skills before leaving, thus reducing the
brain gain opportunities for sending countries. Furthermore,
well-educated temporary EaP migrants in Russia tend to experience severe
occupational downgrading. In fact, the probability of keeping their
occupational status is 11 percentage points higher in the West than it
is in Russia. In contrast, low-educated, temporary EaP migrants fare
better in Russia than in the West [11].

While no studies explicitly examine the SWB
consequences of leaving one transition economy to live in another one,
the Illustration provides some
descriptive evidence implying that immigrants from post-socialist
countries living in other transition countries have lower life
satisfaction than their counterparts living in the West and comparable
life satisfaction levels with non-migrants. The difference in means
between immigrants from transition economies living in other transition
economies and non-immigrants is not statistically significant. All other
differences in means are statistically significant at the 1% level.
While future research will need to confirm this pattern, the evidence
suggests that moving to other transition economies is not associated
with improvements in life satisfaction.

Well-being of migrants after leaving
transition economies

Obtaining a causal assessment of the
well-being consequences of leaving post-socialist economies requires
comparing the outcomes of the same migrants before and after the move
with those of a group of similar stayers. The latter group is the
“counterfactual” and shows what the well-being outcomes of migrants
would have been if they had not migrated.

Some researchers compare the well-being of
natives and migrants and conclude that migrants become unhappier or have
worse labor market outcomes because of migration. Yet the simple
comparison of outcomes between immigrants and natives, or among
immigrant groups, cannot show the causal
effects of migration on well-being. Rather, it shows the simple
well-being differences across groups in the destination country.
Similarly, comparing the well-being of migrants and stayers is
misleading because gains or losses may reflect unobservable differences
between the groups that the researcher cannot measure and take into
account in the analysis. The main problem is that the decision to
migrate is non-random and migrants differ from stayers along many
unmeasurable traits—such as ability, risk tolerance, and motivation.
Potential emigrants may also be happier or richer than the average
person in the migrant-sending transition country. Comparing the
well-being outcomes of migrants and other groups, such as stayers, other
migrants, or natives, does not address the unobservable differences
between the groups and the fact that migration is not random.
Unfortunately, data on international migrants before and after migration
are very scarce, thus limiting the scope for rigorous analysis.

One study uses data from the Gallup World
Poll and statistical matching to create a data set with two time
periods—i.e. before and after migration [3]. The data set has information
on: immigrants from transition economies living in advanced economies;
comparable migrants observed in the source countries prior to migration,
created using statistical matching; and similar non-migrants observed in
both time periods. The year of survey is taken into account in the
analysis to ensure the temporal logic of the created groups.

The authors of the study find that for those
moving to advanced economies, the real household earnings premium due to
migration is about 21,000 international dollars (ID—a hypothetical unit
of currency that has the same purchasing power parity as the US dollar
at a given point in time) per year, or 10,500 ID per adult household
member per year. This earnings premium takes into account differences in
prices and cost of living between different sending and destination
countries. Importantly, the study also finds large and significant gains
in life satisfaction and in perceptions of freedom (i.e. in terms of the
freedom of choice in life). The SWB gain from leaving transition
economies is between 1.0 and 1.2 on a scale from 0 to 10 (0=worst
possible life respondents can imagine and 10=best possible life
respondents can imagine) and is therefore quite substantial. In addition
to boosting incomes and well-being perceptions, migration affects
movers’ freedom satisfaction [3]. Those who leave
transition economies are about 26–27% more satisfied with their freedom
due to migration [3].

Movers from the EU-10 to the non-transition
EU countries realize even larger life satisfaction gains of up to 1.4
points on a scale from 0 to 10, but slightly lower income gains of about
15,500 ID per household (about 9,000 ID per adult household member) [3]. This smaller earnings
premium is unsurprising because the EU-10 migrants are leaving countries
that are wealthier, on average, than the non-EU transition migrants.
Those who leave the EU-10 to live in non-transition EU countries
increase their satisfaction with freedom of choice by 35%.

While the income gains from leaving
transition economies are straightforward, the study provides several
explanations for the SWB improvements. First, the authors show that
income is positively associated with immigrant life satisfaction. In
addition, cultural similarities and shorter distances between the
sending and destination countries might explain part of the positive
life satisfaction effects for immigrants from post-socialist countries.
While there are psychological consequences of leaving one’s home—such as
nostalgia, culture shock, loss of cultural identity, changing reference
norms, and rising expectations—the positive effects of emigration on
life satisfaction and freedom perceptions seem to dominate, at least for
those who move to the West [3]. The study
concludes that migration has positive well-being effects, while also
allowing movers to escape the opportunity constraints at home [3]. Whether the same patterns
hold for temporary migrants or those moving to other transition
economies remains an open question.

Limitations and gaps

Most current analyses lack a proper
counterfactual showing what would have happened to the well-being of
immigrants if they had not migrated. Due to a lack of data tracing migrants
from transition and other countries before and after the move, most studies
compare the well-being outcomes of migrants with those of natives, other
immigrants in the destination country, or non-migrants in the home country.
However, this approach is methodologically flawed and may provide biased
results. Such comparisons may reflect only unmeasurable characteristics
linked to both the emigration decision and well-being—such as ability, risk
preferences, aspirations, and motivation. The direction of causality between
well-being and migration is also unclear: while migration may influence
well-being, those who leave might have higher incomes but lower life
satisfaction before the move.

Currently, only one study has tried to establish
the causal effects of leaving transition economies on both income and SWB
[3]. However, this study uses a
statistically constructed data set which is an imperfect substitute for a
true panel. Further, the study does not distinguish between labor and
non-labor migrants and only shows results for those emigrating to the West.
The well-being effects are likely to differ with the duration of stay in the
host country, which, due to data limitations, the study does not address.
Whether the results hold for migrants from post-socialist countries moving
to other transition countries remains an open question.

One shortcoming of existing studies, and
comparative ones in particular, is the identification of the relevant
reference group for well-being comparisons. Specifically, it is unclear with
whom migrants are comparing themselves: family and friends left back home;
other compatriots in the destination country; other migrant groups; or
natives. It is also likely that reference groups change with time spent in
the destination country. On arrival, migrants are likely to compare
themselves with non-migrants at home, while later on they may compare
themselves with others (immigrants and natives) in the destination country.
Hence, as migrants spend more time in the destination, they may adapt to the
more comfortable living standard abroad and raise their aspirations about
income or well-being, which may decrease their happiness over time.

In addition, studies so far (except [3]) have focused on either the
material or non-material benefits of migration. Yet human well-being is
multidimensional, and the material and psychological well-being consequences
of migration need to be examined side-by-side.

Summary and policy advice

The well-being of post-socialist immigrants is
important for both sending and receiving countries. For destination
countries, and especially those in Europe, immigration from transition
economies may be a partial solution to problems related to unsustainable
fiscal deficits, population aging, and skill shortages. Sending countries
might benefit from remittances and new insights brought by returnees; and
immigrants may also gain from migration, both economically and with respect
to their well-being.

Recent research that has attempted to examine
causal effects finds that leaving transition economies to live in the West
leads to improvements in income, life satisfaction, and freedom perceptions.
This suggests that by “voting with their feet,” migrants from transition
economies can improve their well-being.

Comparative research suggests, however, that
immigrants from transition economies have worse labor market outcomes than
natives and certain immigrant groups. There is also evidence of
“downgrading,” whereby immigrants work in occupations that require fewer
skills than they possess. Often, this is due to the fact that education and
qualifications acquired in the home country are not recognized abroad.
Several correlational analyses also find that immigrants from post-socialist
countries are less happy compared with natives, stayers, and other migrant
groups.

Policymakers in migrant-receiving countries need
to pay more attention to both the material and emotional well-being of
immigrants from transition economies and reduce the barriers to integration
into local labor markets. Policies that indirectly enhance immigrant life
satisfaction could play an additional role. Such policies, which already
exist in some destination countries, can include integration and
assimilation policies, such as language and cultural training, job search
help, translation services, and others.

Policymakers should aim to design and implement
policies based on research that explicitly addresses the causal effects of
migration—either through tracking migrants across international borders, or
through providing credible estimates of what their well-being would have
been in the absence of migration. In addition, while migration may improve
material well-being, the move can also be accompanied by emotional problems
related to being separated from family and friends, adaptation problems, and
culture shock. Policymakers should therefore seek to base their decisions on
research looking at both objective and perceived well-being metrics.

For migrant-sending countries, actively engaging
diasporas (e.g. through the ministry of foreign affairs or diaspora offices
in the home countries, diaspora clubs in the destination countries,
embassies, or local non-governmental organizations) could be key for
ensuring migrant well-being and maximizing the benefits for the home
countries. Migrants not only send remittances, but also contribute to their
homelands through investments and the spread of ideas and technology.
Several post-socialist countries have devoted ministries or ministerial
departments to diaspora affairs that focus on facilitating remittances,
encouraging return migration, or stimulating cultural or language
preservation [5]. Yet, a handful of transition
countries have no offices for diaspora populations, and few countries
explicitly link diaspora affairs with development policy [5]. One area of engagement could be
related to reducing any potential or actual negative consequences of
migration on the health and well-being of the family members left
behind.

Migration does not solve the systemic problems
in the countries that migrants leave, and it is unclear whether the results
of the single study finding positive causal effects apply to migrants moving
to other transition economies. Yet there could be potential “win-win”
situations if migrants from transition economies are happier and more
productive abroad.

Acknowledgments

The author thanks two anonymous referees and the
IZA World of Labor editors for many helpful suggestions on earlier drafts.
Previous work of the author contains a larger number of background
references for the material presented here and has been used intensively in
all major parts of this article [3]. The author is
especially thankful to Carol Graham, who is an advisor to the Gallup World
polls, for valuable comments, joint work on happiness and migration, and
access to the Gallup World Poll data. In addition, the author has greatly
benefited from thoughtful and thorough suggestions and edits from Jo Ritzen,
Artjoms Ivlevs, Ben Elsner, Elena Nikolova, and Derek Stemple. The author is
also very grateful to Margard Ody for her help with locating and procuring
the research articles. All errors remain the author’s own.

Transition economies

Transition economies are the countries in
Central and Eastern Europe and the former Soviet Union which experienced (or
are currently experiencing) democratization and marketization reforms. They
include: Albania, Armenia, Azerbaijan, Belarus, Bosnia and Herzegovina,
Bulgaria, Croatia, Czech Republic, Estonia, Georgia, Hungary, Kazakhstan,
Kosovo, Kyrgyz Republic, Latvia, Lithuania, Former Yugoslav Republic of
Macedonia, Moldova, Mongolia, Montenegro, Poland, Romania, Russian
Federation, Serbia, Slovak Republic, Slovenia, Tajikistan, Turkmenistan,
Ukraine, and Uzbekistan.The post-transition countries (i.e., the EU-11)
are the countries which joined the EU, thus technically completing their
transition processes. These countries include the EU-8 countries, which
joined the EU in 2004: Czech Republic, Estonia, Hungary, Latvia, Lithuania,
Poland, Slovakia, and Slovenia; and the EU-2 countries which joined in 2007:
Bulgaria and Romania; and Croatia which joined the EU in 2013.